They'd ideally would buy it back when they can pay a price for it that is lower than their long term expectation for the IO prices. That is unlikely to be now with 2021 average IO price being the highest ever in history. Re-buying royalties tends to be done privately/directly for the asset rather than from taking over a listed corporate. Thus, the decision is more complicated as the royalty is DDR (or vice versa) so any bid would have to have a takeover premium whilst BHP would have to be willing to take the lower quality sand royalties too (which they wouldn't). DDR unlikely to transact on the asset directly as that is what makes the company and given the bloated corporate structure, too many pigs at the trough to sell the asset reasonably. More likely it could feature as part of a consolidation amongst royalty companies. 

I also held DRR when they were spun out of ILU, however I sold the day before their Feb 24th first (interim) results were announced because I figured their first dividend would be less than the market expected due to South Flank not being operational, so less royalties would have been received in that period compared to what they will get in CY2022.  I was right, their SP dropped almost $1 over the next month, however they are gaining again now as the market is expecting a larger full year dividend to be announced this month.  DRR is just an income play as you won't get capital growth without (a) a higher dividend, or (b) a higher iron ore price which will feed into higher royalty income for DRR.

I believe BHP had a look at buying the royalty in the past, including when it was owned by Iluka, but it was not for sale, or else the price was way higher than BHP thought it was worth.  It is fairly commonplace for mining companies to live comfortable with such royalties.  They just view them as a cost of doing business, much like paying tax, or a government levy on production.  To them it's a small percentage of their revenue and the sort of investments they tend to make are ususally supposed to pay them back multiples on their investment, and I'm not sure that they would think that buying back a smallish royalty (small for them, big for Deterra) would be the best use of funds.  Other companies, usually smaller companies, take a different view, and do buy back such royalties.  It's really all about the views of the management of the individual mining companies.  My own view is that (a) BHP are comfortable with the royalty, and have not indicated previously that they are inclined to want to buy it, and (b) since Deterra are trying to build a business around the MAC iron ore royalty as their cornerstone asset, they would be unlikely to sell the MAC royalty unless it was at a rediculously high price.  

Edit:  Additional:  As Baker's Dozen said, it would have to be a takeover of DRR by BHP, and that is unlikely to happen.

Yes I agree the BHP scenario is not likely and something like Franco Nevada buyout is more likely to make a move and is a bit easier to price.  Appreciate the thoughts and generally agree.  Was just trying to have a model in my head about the BHP position and how they would do a valuation.  I am sure financially its just a NPV exercise based on their internal forecasts for IO and production but as you say its mouse poop to them and not worth the hassle unless there was a big disconnect in the SP.